Dow up more than 3% after Trump win as U.S. stocks surge, Canadian markets also rise

U.S. stocks surged after Republican candidate Donald Trump won the election, with the Dow Jones industrial average gaining almost 1,400 points just before 1 p.m. eastern, while Canadian markets were more muted but also rose.

“It looks like the 2016 playbook all over again,” said John Zechner, chairman and lead equity manager at J. Zechner Associates.

So-called cyclical stocks including banks rose Wednesday, alongside other potential beneficiaries of less regulation and more economic stimulus, Zechner said in an email.

In the U.S., these included financial heavyweights Goldman Sachs and JPMorgan Chase, which saw their share prices jump.

The Dow led the major U.S. indexes with a gain of more than three per cent, up 1,359.40 points at 43,581.28. The S&P 500 index was up 122.99 points at 5,905.75, while the Nasdaq composite was up 446.66 points at 18,885.83.

Elon Musk’s Tesla was one of the big gainers Wednesday, up more than 14 per cent, while Trump Media & Technology Group was up more than six per cent.

Bitcoin also stormed higher, as Trump has pledged to make the U.S. “the crypto capital of the planet.”

The S&P/TSX composite index was up 106.84 points at 24,494.74.

Though Canadian energy stocks are having a good day so far, alongside technology and financials, gains on the main stock index were partially offset by utilities, telecom and health care.

Canadian cannabis stocks plunged as efforts to legalize recreational cannabis in several states failed.

The election results will “shift the economic landscape,” BMO economists wrote in a note Wednesday morning, though they added that it has yet to be seen how campaign rhetoric will translate into reality.

“The lean will certainly be to more tax relief, although the positive growth impact will be countered somewhat by broad trade tariffs and uncertainty, accompanied by a firmer U.S. dollar and higher bond yields,” wrote economists Douglas Porter, Michael Gregory, Scott Anderson and Sal Guatieri.

“The latter are driven by bigger budget deficits, modestly higher inflation risks, and possibly less (U.S. Federal Reserve) easing than previously expected.”

The Fed is set to cut its key interest rate tomorrow by a quarter of a percentage point, the economists wrote, but the pace of cuts may be slower than anticipated in 2025.

The election is a “mixed bag” for Canada, they added, as the health of the U.S. economy is hugely important for its neighbour to the north.

In terms of interest rates, they said the Bank of Canada may have to “tread more carefully” with its own rate cuts to avoid too large a divergence from the U.S. central bank, which could put downward pressure on the Canadian dollar.

The Canadian dollar traded for 71.75 cents US in mid-day trading compared with 71.97 cents US on Tuesday.

The December crude oil contract was up 15 cents at US$72.14 per barrel and the December natural gas contract was up eight cents at US$2.75 per mmBTU.

The December gold contract was down US$75.60 at $2,674.10 an ounce and the December copper contract was down 21 cents at US$4.26 a pound.

With files from The Associated Press